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Marketers and merchants have considered young consumers to be the “holy grail” for generations.

But that approach needs to change. While consumers under 35 are predicted to generate 18 percent of spending in the U.S. by 2020, buyers over 50 will contribute 51 percent according to Visa.

This presents a challenge for online retailers, though. If older consumers control more spending, what is the best way to attract them?

There’s a tendency to think of older consumers as out-of-touch technophobes. Looking at survey data from AARP, though, that stereotype doesn’t hold up. Among consumers in the over-50 demographic: 91 percent own a computer; 75 percent own a smartphone; and 49 percent own a smart TV.

Consumers in this age group are projected to spend $84 billion on tech products by the year 2030. So, there’s no concern about whether it’s possible; the buyers are there. The key is simply to balance customer lifetime value against your cost of acquisition.
Cost of acquisition is always going to be an expense. But, as discussed above, customer loyalty is higher among older shoppers. Generation X generally shows the highest loyalty to a brand, and boomers are not far behind. Thus, your cost to retain older buyers over the course of their lifetime should be much lower.

You can manage to retain older buyers through a combination of an active and trustworthy presentation, plus occasional deals and special offers to make individual buyers feel valued.

Opening to a wider customer base is not without drawbacks, though. Mainly, you will necessarily expose yourself to more risk.

There’s a different mentality regarding risk based on different age groups. Older consumers tend to be more concerned about security than millennial and Generation Z shoppers. They are also more likely to break-off a relationship due to security concerns. At the same time, they may not be as adept at basic security practices, or understand the core principles of online security.

You may get them to buy once, but before older consumers become loyal customers, they’ll expect assurances that their information will be protected and will not be abused. Also, buyers who have not yet forged a relationship with a brand will have less attachment to it.

More than half of online freaud loss results from chargeback and return abuse by customers. The resulting costs eat up an average of 2.38 percent of gross revenue in an organization. However, these kinds of abuses can be countered by building a rapport with customers.

An engaged, loyal buyer is less likely to act on behaviors that are harmful to your brand. It’s important to build the idea in customers’ minds that you’re not simply a faceless online presence. You’re as much a real person as the employees at the grocery store down the street.

The nagging matter of criminal fraud still hangs over the customer-merchant relationship, however. Criminal fraud puts e-commerce merchants at an obvious disadvantage. First, retailers can’t verify customers’ identities in person the way a card-present retailer can. Online sellers also don’t have the liability protection offered by EMV chip cards. Really, the fact that brick-and-mortar retailers have EMV technology, while online retailers don’t, ended up pushing a lot of fraudsters into the digital environment and magnifying the problem.

One idea is to weave customer education into the process of building a customer rapport. You can promote security best practices, signs of fraud, and other important information alongside interactions via social media, email, and on your site.

And of course, be sure you employ multiple antifraud tools, such as geolocation, 3-D Secure, and fraud scoring, in a way that they compliment and reinforce one another as part of a multilayer solution.

Attracting older consumers is a lucrative—and surprisingly easy—goal for online retailers. Your efforts won’t amount to much, though, without careful consideration and ongoing defense against loss.

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Retailers Online payments Loyalty and rewards ISO and agent